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Subrogation is an idea that's well-known among insurance and legal companies but often not by the policyholders who hire them. Rather than leave it to the professionals, it is to your advantage to understand the steps of how it works. The more information you have, the better decisions you can make about your insurance company.

Any insurance policy you own is a commitment that, if something bad happens to you, the insurer of the policy will make restitutions in one way or another without unreasonable delay. If your home burns down, for instance, your property insurance steps in to remunerate you or pay for the repairs, subject to state property damage laws.

But since determining who is financially responsible for services or repairs is sometimes a confusing affair – and time spent waiting in some cases increases the damage to the policyholder – insurance firms usually opt to pay up front and assign blame afterward. They then need a way to regain the costs if, once the situation is fully assessed, they weren't responsible for the expense.

For Example

You go to the doctor's office with a gouged finger. You give the receptionist your medical insurance card and he records your plan details. You get taken care of and your insurer gets a bill for the medical care. But on the following morning, when you get to your workplace – where the accident occurred – your boss hands you workers compensation forms to turn in. Your employer's workers comp policy is actually responsible for the bill, not your medical insurance policy. It has a vested interest in getting that money back in some way.

How Subrogation Works

This is where subrogation comes in. It is the process that an insurance company uses to claim reimbursement after it has paid for something that should have been paid by some other entity. Some insurance firms have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Normally, only you can sue for damages done to your person or property. But under subrogation law, your insurer is considered to have some of your rights in exchange for having taken care of the damages. It can go after the money that was originally due to you, because it has covered the amount already.

How Does This Affect Individuals?

For one thing, if your insurance policy stipulated a deductible, it wasn't just your insurer who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to be precise, $1,000. If your insurance company is lax about bringing subrogation cases to court, it might opt to recover its expenses by upping your premiums and call it a day. On the other hand, if it has a competent legal team and pursues those cases enthusiastically, it is acting both in its own interests and in yours. If all of the money is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found one-half accountable), you'll typically get half your deductible back, depending on the laws in your state.

In addition, if the total price of an accident is more than your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as Criminal defense taylorsville ut, pursue subrogation and succeeds, it will recover your losses as well as its own.

All insurance agencies are not created equal. When comparing, it's worth researching the records of competing firms to determine if they pursue valid subrogation claims; if they do so in a reasonable amount of time; if they keep their accountholders posted as the case proceeds; and if they then process successfully won reimbursements immediately so that you can get your losses back and move on with your life. If, on the other hand, an insurance company has a record of paying out claims that aren't its responsibility and then covering its bottom line by raising your premiums, you'll feel the sting later.